New Alliance Progress Report May 2013

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New Alliance for Food Security and Nutrition

2013 Progress Report Summary


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Contents

1. Introduction 1

2. Key challenges and opportunities 1

3. New Alliance goals and commitments 2

4. Progress to date 3

Country-level implementation and coordination 3

Government policy commitments 3

Private sector investment commitments 4

Development partner financial commitments 6

Responsible investment 6

Enabling Actions 7

Expansion 8

5. Annexes 8


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1. Introduction

The New Alliance for Food Security and Nutrition (hereafter New Alliance) was launched in 2012 under theUS G8 Presidency. It is a joint initiative between African leaders, the private sector and development

partners to accelerate responsible investment in African agriculture and lift 50 million people out of povertyby 2022. The New Alliance aims to catalyse responsible private sector investment in Country InvestmentPlans and thereby support the Comprehensive Africa Agriculture Development Programme (CAADP) as theguiding framework for agricultural transformation in Africa.

The New Alliance works closely with the Grow Africa partnership, convened by the African UnionCommission, New Partnership for Africa's Development (NEPAD) and the World Economic Forum, with theshared goal of mobilising responsible private sector investment in line with national agriculture strategiesand CAADP plans.

This is the first annual progress report on the New Alliance. It draws on six country-level progress reportsprepared in April 2013 by the governments of Burkina Faso, Cote dIvoire, Ethiopia, Ghana, Mozambiqueand Tanzania in conjunction with G8 members and private sector partners, as well as a Grow Africa reviewof progress against private sector commitments set out in Letters of Intent (LOI).

This report covers implementation since the launch of the New Alliance in 2012. It is somewhat prematureto try and assess the overall impact of the New Alliance to date, therefore the report focuses largely onprogress in implementing mutual commitments and issues and challenges emerging from this earlyexperience.

2. Key challenges and opportunitiesIn its first year the New Alliance has begun to help promote responsible private sector investment in African

agriculture, complementing existing efforts that support CAADPs agricultural transformation agenda.

However, there is still much to do to ensure the New Alliance makes a lasting contribution to poverty

reduction and food and nutrition security across Africa. This will require strong leadership at all levels and a

willingness to work in partnership with, and learn from, other actors.

The following key challenges and opportunities have been identified from experience to date and will need

to be addressed by the New Alliance in the future:

Country-level leadership:the New Alliance will only be sustainable at country-level if it is led byeach partner country. While countries are already providing high-level leadership, a key priority for

2013 is to strengthen this and ensure the alignment of the New Alliance with country-level processes

and timelines for planning, budgeting, policy making and review. Cooperation Frameworks and other

New Alliance tools can then be used effectively to catalyse investment in Country Investment Plans.

Facilitating a new type of dialogue:Cooperation Frameworks provide an important tool to trackand account for mutual commitments. To add real value, these commitments need to be developed

through on-going dialogue involving all stakeholders (government, local and international private

sector, development partners and civil society), rather than through a series of bilateral negotiations.

Institutional pace and capacity:private sector partners report a considerable mismatchbetween the response speed and capacity of government agencies and the pace of reform, on theone hand, and the responsiveness expected or required by the private sector to reassure investors

and deliver on their investment, on the other.


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Joined-up government:high-level leadership and commitment in each country has been criticalto the progress so far, but this leadership needs to be reflected in the priorities and commitments of

line ministries and local government, who provide the day-to day contact points for local and

international companies.

Access to finance: access to investment and working capital in agriculture remains a major

constraint to investment despite efforts to improve these services. While the New Alliance is seekingto improve access to f inance in some areas through the Enabling Actions, further action by

governments, financial institutions and development partners needs to be identified.

Leveraging and focusing public investment:private sector partners identify many pre-competitive investment needs and market failures that constrain progress on investment projects.

The New Alliance needs to find ways to support governments to assess and prioritise these

constraints and to reflect them in Country Investment Plans. Public investment from governments

and development partners can then be targeted strategically to address these gaps.

Womens economic empowerment:improving womens access to productive assets and toagricultural services and supporting women as entrepreneurs in agriculture would make a significant

contribution to the New Alliances goals.

Learning how to work with smallholders at scale:there are already some good examples ofsmallholder engagement in new investment projects, but the New Alliance needs to learn how to

engage with smallholders at scale and how to help those that can, to make the transition to small,

commercially viable family farms.

Engaging local and global civil society organisations (CSOs):many existing partnersrecognise the contribution CSOs could play, for example in supporting smallholder aggregation or

assessing the impact of investment projects. There is a need for closer engagement with CSOs and

greater transparency on the New Alliance in order to address their concerns and draw on their

expertise and insights.

3. New Alliance goals and commitments

The overall goal of the New Alliance is to raise 50 million people out of poverty by 2022 whilst contributing to

improved food and nutrition security. The New Alliance aims to achieve this goal primarily by stimulating

responsible private sector investment in agriculture, contributing to inclusive agricultural sector growth.

The New Alliance Cooperation Frameworks in each country outline mutual commitments of governments,the private sector and development partners, including targeted public investment and crucial policy reforms.

These coordinated, complementary commitments aim to create an enabling environment for responsible

investment and address critical market failures, in order to accelerate private sector investment in support of

Country Investment Plans.

A New Alliance Accountability Framework, (a draft of which is now under consultation) will set out how we

will track and report results and impact in future years, in line with the overall CAADP results framework and

as an input into its monitoring and evaluation framework at national, regional and continental level. It is

intended that the Accountability Framework will be presented for approval at the next Leadership Council,

for implementation in 2014.

While the evidence suggests a clear, positive relationship between agricultural sector growth and povertyreduction, understanding of the linkages between investment, agricultural growth and other important

development outcomes, such as food security, nutrition and womens economic empowerment is still


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relatively weak. The New Alliance provides an opportunity for all stakeholders to investigate and develop a

better understanding of these linkages in order to facilitate responsible public and private sector investments

that contribute to these outcomes at scale.

4. Progress to dateCountry-level implementation and coordination

An important added value of the New Alliance is its contribution to the CAADP facilitated dialogue

between government, private sector,

development partners and civil society in

each country to identify key constraints to

responsible investment in agriculture and to

advance coordinated action to address these

constraints. This dialogue needs to be

aligned with and support the existing policy

and planning processes in each country.

Cooperation Frameworks are intended to

capture the outcome of this dialogue. They

should be reviewed and updated regularly to

reflect evolving circumstances and

commitments.

Developing this multi-stakeholder, country-

level dialogue and establishing clear leadership to drive and track progress has taken time acrossthe initial six New Alliance partner countries. Progress has been mixed, reflecting different capacity,

priorities and events in each country. This is an issue also identified by the private sector, including

some companies that have already signed LOIs but without participation in this type of exchange.

There is also a particular need to engage civil society proactively in this dialogue and as a partner in

investment projects.

Government policy commitments

The Cooperation Frameworks agreed in the six New Alliance partner countries include a total of 97

government policy commitments to be implemented to different deadlines over a three-year period(see Annex 1 for more details). Of these 97 commitments, 27 have already been implemented in full,

most of them in advance of their agreed deadline. Progress is underway implementing a further 55

commitments, approximately three-quarters of which are on a timeline beyond May 2013.

Government pol icy commitments in Burkina Faso, Cote DIvoire, Ethiopia, Ghana, Mozambique and Tanzania

TOTAL No progress Some progress Completed

Due by May 2013 25 1 16 8

Due after May 2013 72 14 39 19

TOTAL 97 15 55 27

Lozane Farms are a seed company working inMozambique. Lozane Farms have startedcontracts with farmer group leaders and are now in

the process of entering into Memorandums ofUnderstanding with individual farmers. LozaneFarms are investing in a seed processing plant asdemand grows ($150-180,000), and are extendingbusiness linkages and partnerships with localcompanies to foreign partners. They have formalrelationships with 425 maize and soya(intercropping) farmers for seed supply andprocurement.


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Of the 79 investment projects which reported

progress to Grow Africa (out of a total of 97

projects): 100% are moving forward with internal

company approvals; 94% have begun preparatory

work, including market research, field visits,

partnership exploration/negotiation, and

stakeholder consultation; and 61% have started to

invest with tangible progress on-the-ground. Many

of these are in a pilot stage awaiting scale-up, but

about 40% are at investment stage with operations

moving to scale in at least one component of their

overall commitment. Investments in production

and processing are taking longer than those for inputs and sourcing from farmers for existing supply

chains.

These investments include a variety of business models and institutional arrangements, some

facilitated by Grow Africa, including joint ventures between multinational and local companies, public-

private partnerships and partnerships between private companies and NGOs. New models ofsmallholders entering value chains are also emerging.

Private sector partners have reported a number of significant constraints to implementing their

investment plans (see the diagram below based on Grow Africas review). The three most common

challenges identified in all countries were:

(a) Laws, policies or regulations that constrain business operations

(b) Government capacity to respond quickly

(c) Access to capital

There is also a clearly identified need for enhanced communication between governments and the

private sector, including opportunities for continued dialogue, as companies refine business plans.

This requires companies to have a strong presence on the ground to facilitate regular, face-to-face

engagement with governments and local partners.

Another recurring barrier is the lack of adequate finance to kick-start activities. Access to appropriate

capital is a particular challenge for farmers and small and medium enterprises (SMEs), but is also a

concern raised by many larger companies. Several companies have established input pre-financing

arrangements with smallholders supplying them to address gaps in local commercial credit markets.However in many value chains this is not a suitable, sustainable or competitive solution.

Tanseed are supporting a nutrition-enhanced

quality protein maize project in Tanzania,

working with over 8,000 smallholders for

production and distribution of seed. Tanseed

have initiated testing of drought-tolerant maize

hybrids for possible registration in Tanzania and

have finalised a partnership agreement with

USAID to support certified rice seed production

that will benefit 16,667 smallholder farmers.


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Cote dIvoire made a number of policy commitmentswith the objective of securing rural land tenure andfacilitating access to land for smallholder farmers and

private enterprises. A pilot of the Rural Land Act,implemented through programmes to demarcate villageland and through the issuance of land tenurecertificates, is due to be completed in Cote dIvoire byDecember 2015. Already, a national programme forland rights is being implemented; a pilot programme isbeing signed with the EU. The Government of CotedIvoire has also acted on their commitment to increaseaccess to land for women and youth from rural areasby ensuring development programmes are targeted toreach at least 15% rural women and 40% youth.

Development partner financial commitments

In the six existing New Alliance partner countries, a total of almost $4 billion has been committed

from 2012-2015 in support of Country Investment Plans and the goals of the New Alliance. Based on

a very approximate assessment of progress to date, reported in the table below, disbursement of

funds at this aggregate level is broadly on track in four out of the six countries.

Country G8commitments

2012-2015(USD)

Estimatedproportion

committed toend April 2013

Disbursement todate

% disbursedagainst committed

to April 2013

Burkina Faso $644m $361m $313m 87%

Cote d'Ivoire $290m $59m $20m 34%

Ethiopia $1,199m $485m $637m 131%

Ghana $542m $151m $138m 91%

Mozambique $384m $134m $106m 79%

Tanzania $894m $264m $109m 41%

Total $3,952m $1,455m $1,323m 91%

NB: All figures are rounded to the nearest million USD. Commitments are taken from Cooperation Frameworks, with 2013 commitments pro-rated. Disbursement figures are from G8 members and may differ from those listed in Country Reports due to exchange rate differences,reporting on commitments, rather than disbursements or varying report periods used. USD conversion has been done at exchange rates on 8

th

May 2013 except in the case of the Japanese Yen where OECD DAC 2012 rates have been used.

At this stage, it is not possible to

comment on how these funds have been

allocated or to assess their contribution to

leveraging private sector investment. Not all

progress reports provided detailed

information on how development partner

funding was aligned with the Country

Investment Plan (see Annex 3 for more

details). Future reporting will assess more

closely if and how development partner

funding is aligned with Country Investment

Plans.

Despite clear progress on disbursement and a commitment to align funding with Country Investment

Plans, development partner funding could be prioritised more strategically in the future to support

governments to address key gaps or bottlenecks that constrain responsible private sector investment

and growth.

Responsible investment

Promoting responsible investment is a core New Alliance commitment and concern, incorporating

not just measures to ensure investments do no harm but also positive action to maximise thepositive impact that investments can have on women, smallholder farmers and families nutritional

status.


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The Agriculture Fast Track was launched at theWorld Economic Forum in Cape Town, SouthAfrica. An initial pipeline of projects wasdeveloped through a scoping exercise, and thefirst two grants are expected to be announced atthe launch event. The Fund currently has $27m incommitments from the USG, Sweden and the

AfDB, and additional donors, including Denmarkand Norway, have expressed an interest inparticipating.

One example of this is the commitment in each New Alliance Cooperation Framework to support theimplementation of the Voluntary Guidelines on the Responsible Governance of Tenure of Land,Fisheries and Forests in the context of National Food Security. Many Cooperation Frameworksinclude specific policy measures to strengthen land tenure and rights.

While it is too soon to evaluate the impact of investment commitments made in 2012, early results

reported by companies to Grow Africa include:

More than $60 million invested in activities that incorporate smallholder farmers intocommercial, market-based activities.

Approximately 270,000 metric tonnes of commodities sourced within partner countries thevast majority from smallholders, and the equivalent of around $300 million in sales from thesefarmers fed into the market system.

Almost 800,000 smallholders reached with a mix of training, service provision and marketaccess.

Enabling Actions

At its launch in 2012, the New Alliance supported a package of Enabling Actions that were designed

to spur agricultural growth and create the right enabling environment for accelerated private sector

investment in Africa, with a focus on smallholder

farmers and women. These Enabling Actions

were intended to support the implementation of

the New Alliance Country Cooperation

Frameworks and to be integrated into country

food security strategies. When implemented

together, in conjunction with coordinated country

strategies and investment plans and privatesector investments, these actions will be an

effective catalyst for accelerated agricultural

sector growth and sustained poverty reduction.

In 2013, the United States has continued to lead on these commitments and substantial work has

been done to bring several prioritised activities to fruition, focused initially on New Alliance partner

countries (See Annex 4 for details). The Enabling Actions moving forward in 2013 include:

- Launching an Agriculture Fast Track Fund that supports the preparation and financing ofbankable agricultural infrastructure projects, hosted by the African Development Bank.

- Setting 10-year targets for yield improvements and the adoption of improved technologies, andlaunching a Technology Platform with the Consultative Group on International Agricultural

Research and the Forum for Agricultural Research in Africa in consultation with the Tropical

Agricultural Platform and the Coalition for African Rice Development (CARD).

- Launching a Scaling Seeds and Other Technologies Partnership, housed and coordinated by theAlliance for a Green Revolution in Africa (AGRA).

- Convening an international Conference on Open Data for Agriculture in April 2013, hosted by theUnited States Government and the World Bank, to develop options for the establishment of a

global platform to share reliable agricultural and related information specifically of relevance to

African countries, farmers, researchers and policymakers.

- Launching the Platform for Agriculture Risk Management (PARM) as a facilitative entity, drawingfrom the collective expertise of its contributing entities, connecting demands in low-income

countries and lower middle-income countries.


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- Completing National Agricultural Risk Assessments in three New Alliance countries, conductedby the World Bank in close partnership with New Alliance countries.

- Supporting the Scaling Up Nutrition (SUN) movement, and committing to a process to improvetracking and disbursements for nutrition across sectors and ensuring the coordination of nutrition

activities across sectors.

- The Global Agriculture and Food Security Program (GAFSP) had raised an additional $375million at the end of 2012, as part of the Public Sector Windows $1.2 billion recapitalization

campaign.

Expansion

Sustained progress towards the New Alliance goal of lifting 50 million people out of poverty by 2022

relies on more countries joining the New Alliance and working in partnership to unlock private sector

investment and growth. Four new potential partners expressed an interest in joining the New Alliancein 2013: Benin, Malawi, Nigeria and Senegal. All of these have shown a commitment to and have

made progress under the CAADP framework. They have all demonstrated a commitment to, and

readiness for, a policy reform process to promote responsible private sector investment in

agriculture; and all four have the necessary backing of development partners.

Nigeria, Malawi and Benin have been developing new Cooperation Frameworks as a joint effort

between government leads, development partners, private sector and civil society. These will be

formally launched at a New Alliance event on 8 June 2013. It is anticipated that Senegal will finalise

their Cooperation Framework later in 2013.

5. Annexes

Annexes to follow. For more information on the New Alliance, visit: http://bit.ly/New-Alliance


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This report has been produced by the Department for International Development (DFID) with the support ofthe other two convening co-chairs of the Leadership Council, the African Union Commission and the World

Economic Forum. It draws on country reports produced by the governments of Burkina Faso, Cote dIvoire,Ethiopian, Ghana, Mozambique and Tanzania and a Grow Africa review of private sector investmentcommitments. The full report and its annexes are available to view at:www.gov.uk/government/news/new-alliance

Department for International Development22 WhitehallLondonSW1A 2EGUK

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New Alliance Progress Report May 2013

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